MedPAC recommends quality measure consolidation

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Dive Brief:

The Medicare Payment Advisory Commission (MedPAC) recommended in its annual June report the consolidation of four hospital reporting programs into a small set of population health and patient experience measures that consider social determinants.

MedPAC also refined its recommendations for freestanding emergency departments, creating a differentiation in payment for urban and rural EDs. Rural facilities could voluntarily elect to become outpatient-only, be paid for emergency and clinical services and receive a fixed block subsidy for operating costs. Urban facilities, which often treat lower-acuity patients, would have payments reduced by 30%.

Additionally, MedPAC has determined CMS' Hospital Readmissions Reduction Program (HRRP) was ultimately successful in its stated mission. The commission also believes hospital mortality may have decreased for all conditions after the implementation of HRRP.

Dive Insight:

MedPAC, the congressional agency tasked with analyzing Medicare and the healthcare delivery system, has been a staunch leader in the chorus against some quality reporting measures. Last year, the commissionpushed for complete repeal of the Merit-based Incentive Payment System (MIPS), which is one of the payment tracks in MACRA, suggesting instead a new program that withholds a portion of payments to create a rewards pool. The commission's recommendations aren't binding, but meant to inform Congress as it makes decisions.

Still, most industry groups believe MedPAC's call to repeal MIPS is too radical. The American Hospital Association (AHA), for instance, urged MedPAC to “use data and experience from the field before advocating for major changes to the MIPS.”

This time around, the commission looked at the potential to create a single quality-based payment program for hospitals that would replace four current hospital payment incentive programs currently used under Medicare: the Hospital Inpatient Quality Reporting Program, Hospital-Acquired Condition Reduction Program, Hospital Value-based Purchasing and HRRP.

"The commission is concerned that these overlapping hospital quality payment and reporting programs create unneeded complexity in the Medicare program," according to the report.

The single payment program, called the Hospital Value Incentive Program (HVIP), would be patient-centric, focus on population health and encourage coordinated care across providers. It also would account for social determinants of health by adjusting payment through peer grouping. MedPAC believes HVIP would be more fair to hospitals that treat a disproportionately high volume of low-income patients, reduce administrative burden and be simpler to administer.

Considering its heavy reliance on population health measures, HVIP might receive pushback from specialists. In opposing MedPAC's previous recommendation to repeal MIPS, the Alliance of Specialty Medicine argued that population-based measures are limited in evaluating quality and cost of specialty care. The group believes the implementation of population health measures would hinder specialists’ performance in large entities.

On freestanding emergency facilities, the commission believes the increase in freestanding EDs has created policy concerns related to the expansion of these facilities in urban areas where there may not be a dire need for them. In rural areas where community clinics are shuttering and access to emergency services is becoming sparse, freestanding EDs provide a means of maintaining access to care.

MedPAC believes the costs urban freestanding EDs are incurring may be lower than on-campus EDs, although they are being paid the same rate that Medicare pays for higher-acuity patients often cared for at the latter. A 2017 study from the Annals of Emergency Medicine found that free-standing ED patients paid as much as 10 times more than patients who visit urgent care with similar diagnoses. That study, however, has been disputed by some clinicians.

The commission voted to reduce payments to freestanding EDs within six miles of an on-campus ED by 30% in April. AHA called the proposal "unfounded," and said the payment reduction would exacerbate Medicare's "record underpayment of outpatient departments."

Correction: An earlier version of this article incorrectly said that after the implementation of the Hospital Readmission Reductions Program, hospital mortality may have increased for patients with heart failure. It actually appeared to decrease for all conditions.